Construction or temp – short for temporary loans are set up and drawn in different steps during the total construction time. When it completes, you will then take measures to halt the construction lending and apply for a permanent loan. This stage becomes easy if you opt for a “Construction to Perm” loan. However, if you do not, then the whole system of reapplication will start. If you are in search of the conversion process, this piece is a perfect read.

Want To Convert? Try Modification Instead

If you already went for a construction (temp) to perm loan, you don’t need to close and reapply. One of the benefits of construction to perm loan is that it allows you to modify and change your current to the permanent stage, and there is usually no need to requalify for a permanent loan.

When 30 days from construction completion are left, the lender starts to ask about the certificate of occupancy from the county along with the appraiser’s final inspection since the lender has to get the file ready for modification.

Some lenders may ask you to go to the closest Attorney or Title Company for modification of your package. On the other hand, some usually send the package out to you with instructions to follow and where to sign with notary information for the documents. Once this process completes, the file is submitted to the lender again.

Advantages of Construction (temp) to Perm Loan

You must know that construction to perm loan is in need of just one closing, and that saves you a lot of costs and equips you with multiple stress-reducing features. When you are in the planning stage of the entire process and are in search of a lender, try getting this type of loan sanctioned.

Is Refinancing Necessary?

It depends from case to case. However, if you must refinance into a fresh perm loan, round up all the necessary documents you used at the time of the temporary loan with up to date income and asset documentation.

The file may take around 3 weeks to process on the whole. Check with your lender; sometimes they have a per-day interest charge on the balance construction loan. Therefore starting this conversion process at least 30 days or a month before your project completes makes sense.


Contact your closer attorney or title company that helped you close your construction loan. They are already sufficient with the primary closing and can easily pull up the file and go on with the new closing of your fresh permanent loan. However, if this is not possible, ask for a new closer suggested by your lender since the suggestion they make will always have superb customer service.


Truth be told, the best thing is to get a conversion rather than reapplying for a fresh one. However, understanding your options takes time and efforts. Therefore we advise you getting a consultation from a professional at Red door Funding. Call at (832) 539-1099

Skip to content